Early Solaroz Sale Completion Cuts Lithium Energy’s Project Risk
Lithium Energy Limited has fast-tracked the sale of its remaining stake in the Solaroz Lithium Brine Project, securing US$21.7 million ahead of the planned timeline and strengthening its financial position.
- Early completion of Tranche 2 sale of Solaroz Project to CNGR
- Receipt of US$21.7 million (~A$33 million) cash on 15 December 2025
- Previous Tranche 1 sale brought in US$33.8 million (~A$52 million) in April 2025
- US$3 million escrow established as security for Lithium Energy’s performance
- Deferred payment of US$4.5 million contingent on lithium price benchmarks
Early Completion Signals Confidence
Lithium Energy Limited (ASX, LEL) has announced the early completion of the sale of the remaining interest in its Solaroz Lithium Brine Project in Argentina, receiving US$21.7 million (approximately A$33 million) on 15 December 2025. This payment represents the second tranche of the sale to CNGR Netherlands New Energy Technology B.V. (CNNET), a subsidiary of one of the world’s largest battery materials producers, CNGR Advanced Material Co Ltd.
The early receipt of funds, originally scheduled for 9 January 2026, not only accelerates Lithium Energy’s cash inflows but also reduces its exposure to the project, allowing the company to focus on other strategic priorities. This move follows the initial tranche completed in April 2025, which brought in US$33.8 million (around A$52 million), underscoring the substantial value of the Solaroz asset.
Financial and Strategic Implications
Alongside the tranche payments, CNGR has placed US$3 million into a joint escrow account held by JP Morgan in Hong Kong. This escrow serves as security for Lithium Energy’s obligations under the sale agreement, reflecting a structured approach to risk management in the transaction.
Importantly, the deal includes a deferred consideration clause of US$4.5 million (approximately A$6.9 million), payable if the benchmark lithium carbonate price exceeds US$23,000 per tonne averaged over any four-month period between late April 2025 and December 2026. This provision aligns the final sale value with market conditions, potentially enhancing returns if lithium prices surge.
Positioning Amid Market Dynamics
The Solaroz Project sale is a significant milestone for Lithium Energy, marking a decisive step in monetising its Argentine lithium assets amid a dynamic global battery materials market. CNGR’s involvement, given its scale and integration in the battery supply chain, adds credibility and strategic weight to the transaction.
For investors, the early completion and structured payment terms provide clarity on near-term cash flows while leaving room for upside linked to lithium price movements. However, the deferred payment’s reliance on volatile commodity prices introduces an element of uncertainty that will require close monitoring.
Bottom Line?
With the Solaroz sale wrapped up ahead of schedule, Lithium Energy’s next challenge will be navigating lithium price swings to maximise deferred gains.
Questions in the middle?
- Will lithium carbonate prices surpass the US$23,000/tonne threshold to trigger the deferred payment?
- How will Lithium Energy deploy the accelerated cash inflows from the Solaroz sale?
- Are there further asset sales or strategic moves planned following this transaction?
